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Gender bias means lower severance for women

A new study finds evidence of a glass ceiling in severance payouts to women.

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Just as I was almost convinced the glass ceiling had disappeared, I was proven wrong - and in my own area.

Despite the minimum (and usually minimal) statutory amounts for dismissal provided in various employment standards acts across the country and federally, courts provide much, much more - usually anywhere from three to 24 months. The amounts have varied depending upon many factors (I document 132 in my book The Law of Dismissal) but generally are measured by the factors delineated in a 1960 decision, Bardal. Those factors are the position, length of service, age and re-employability. Notably, neither the Bardal nor my 132 factors list gender bias as having any relevance.

Kenneth Thornicroft, a professor of business law and employment relations at the University of Victoria, recently published a study of all severance pay decisions by Canadian courts of appeal - 132 in total - from 2000 to 2011. He found on average women were awarded about six weeks less severance than were men, when all other factors were equalized.

Since wrongful dismissal damages are based on employees' income, this compounds the disadvantage women are already at. As Statistics Canada notes in a 2010 analysis, college-educated women on average earn 84% of the wages of college-educated men, so severance is already less.

Because 99% of cases never get to trial, let alone an appeal, how women fare in negotiated wrongful dismissal settlements has a far greater impact than court awards. Professor Thornicroft had his students negotiate severance settlements using one set of facts. While handing out the assignment, the professor referred to the dismissed employee as "he" to half of them and "she" to the other half, to determine whether the employee's gender affected the severance the students negotiated. The students were split nearly equally with regard to gender, and he divided them up equally into acting for the employee and employer. These were not judges, who are usually older, but young university students, whom one might presume had limited gender biases.

Yet the results were surprising. The mean settlement negotiated on behalf of female employees was about two months less than that negotiated for men. In fact, women fared the worst when represented by female negotiators. The lowest average settlement - 13.62 months - occurred when a female student represented a female employee and a male represented the employer. The highest - 17.29 months - occurred when a male represented a male employee and a woman represented the employer. Women students negotiated higher awards for male employees than they did for female ones.

"The results support the somewhat counter-intuitive notion that females have a more pronounced gender (and in favour of males) than do their male colleagues," Professor Thornicroft noted.

That "is all the more startling when one considers that the female negotiators represent a generation that has had more educational and vocational opportunities open to its members than any previous female cohort."

He expresses concern that women "appear likely to achieve lower settlements, will have those settlements calculated in the workforce on lower wages and are less likely to pursue those rights when faced with a lowball settlement offer."

Professor Thornicroft attributes women's lower severance award to the relative paucity of women judges, a theory that is belied by the result of the negotiations in which women negotiated less for women than they did for men.

The only reason I can see for this is the view, perhaps of both sexes, that men are usually the primary breadwinner so their unemployment has a harsher impact on the family. But as that is less often the case, will the gender impact gradually disappear?

I am hopeful that exposing the bias, so that employers, women and the judiciary are cognizant of it, is the first step toward its eradication.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces and is author of The Law of Hiring in Canada.

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